How does the PTA industry chain perform when crude oil falls?

Crude oil fell “cliff style”, a new variant virus in South Africa triggered a huge wave in the market, and US oil plunged 13%, the largest decline since April last year. As of the close of last Friday (November 26), the price of West Texas Intermediate crude oil (WTI) futures on the New York Mercantile Exchange fell $10.24, or 13.1%, to $68.15/barrel. London Intercontinental Exchange Brent crude oil (ice) futures fell $9.5, or 11.6%, to $72.72/barrel.

Under the heavy fall of crude oil, today (November 29) all products of PTA industrial chain fell, with PTA main futures down 4.89%, ethylene glycol main futures down 4.37%, staple fiber main futures down 5.72%, and the spot market also showed fatigue.

The domestic PTA spot market fell sharply, and the average market price was 4619 yuan / ton, down 3.31% from the previous day and up 38.14% year-on-year. Honggang petrochemical and Yadong petrochemical units are about to be overhauled, and the start-up of domestic PTA units will decline, but it will remain at the high level of 81.71%. In addition, the downstream polyester plant reduced production, the demand side was expected to decline, and the supply showed a slight accumulation of stocks. The short-term cost support collapsed, superimposed with the expectation of production reduction in many mainstream polyester factories, and there is still pressure on PTA supply and demand. It is expected that the short-term PTA price will remain mainly downward.

The decline of ethylene glycol market is still the main theme, which is closely related to the sharp decline of coal price. Under the manipulation of early funds, the chemical industry as a whole is divorced from the fundamentals, and excessive fanatical speculation leads to policy intervention. The market gradually returns to rationality. Ethylene prices also weakened slightly and the cost side was under pressure. The performance of terminal demand orders is poor, PTA continues to gradually enter the inventory accumulation cycle, and the production reduction plan of polyester plant is implemented. However, at the same time, some units are overhauled, and the demand side is intertwined with long space. However, at present, all ethylene glycol processes have lost production. If the price continues to decline, it may frustrate the enterprise’s production enthusiasm, so the downward space is limited.

Last week, the price of polyester staple fiber rose briefly due to the rise of cost in the short term, but it was only a flash in the pan due to various factors. At present, the price of 1.4d * 38mm is 7243 yuan / ton, down 11.02% from the beginning of November and up 26.23% year-on-year. The downstream pure polyester yarn market is weak, the consumer terminal has a strong wait-and-see atmosphere, the transaction is cold, the local power restriction policy has basically ended, and the downstream textile manufacturers are mainly just in need of procurement, lacking large order support. In November and December, most yarn factories need to pay production costs, and the capital flow is generally tight. They have reduced the procurement of polyester staple fiber and other raw materials. It is expected that the short-term polyester staple fiber will still show a weak shock situation without substantial improvement in supply and demand.

Polyester filament market is promoted by mainstream polyester filament factories in Jiangsu and Zhejiang. Today, individual specifications are reduced by 100-200 yuan / ton. The quotation of polyester POY (150D / 48F) is 7200-7650 yuan / ton, that of polyester DTY (150D / 48F low elasticity) is 8900-9300 yuan / ton, and that of polyester FDY (150D / 96F) is 7400-7850 yuan / ton. The performance of orders in the terminal market is still weak, customers’ intention to take goods is not high, and the overall market trading atmosphere is light. From the end of this month, some weaving factories plan to continue to shut down and reduce the burden. The pressure on the cost side increases, the mentality of the terminal weaving factory tends to be cautious, and the bad conditions in the upstream and downstream are superimposed. It is expected that the price of polyester filament will remain weak in the short term.